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Whilst it may be some way off, the departure of the United Kingdom(UK) from the European Union (EU) will have implications for those companies exporting to and importing from the UK.

The EU has some 30 free trade agreements (FTAs). In 2015, Australia and the EU agreed to start the process of negotiating an FTA. The EU is also currently negotiating FTAs with the USA, Japan and Canada.

Post BREXIT points of impact on your business’s trade into and out of the UK may include:

potential loss of access to EU FTA benefits for UK imports and exports – this could mean increased customs duties for those goods

the possible imposition of customs duty on UK originating goods when imported into the EU

the possibility of 'trapped' customs duties when using the UK as a hub for goods going into the EU – e.g. duties paid on import into the UK and subsequent duties when those goods are imported into the EU

the requirement to prepare formal import and export documentation for goods traded between the EU and UK which would increase costs and administrative burden on business and

the updating of trade management and invoicing systems to rectify the current processes for EU and non-EU goods.

Much of the impact will depend on what special trade relationship, if any, the UK can negotiate with the EU, as part of the BREXIT negotiations.

So whilst BREXIT may be some time away, contingency planning on how to deal with your business supply chain to mitigate the potential costs and impacts should start now.

Additional commentary

For further analysis, visit the KPMG UK website, which provides additional commentary and resources.